JP Morgan Chase will launch its own smartphone payment platform in mid-2016, it said Monday, going head-to-head with rival services from Apple, Google and Samsung.
Chase Pay will be based on CurrentC, a retailer-led mobile payment system that has largely been written off by Silicon Valley techies for its reliance on barcodes rather than the more sophisticated NFC (near-field communications) technology adopted by its competitors.
It works through an app that displays a barcode on the customer's smartphone screen. The retailer scans the barcode to complete the payment. There's also a version that works online.
While its reliance on barcodes might not be as cool as the tap-and-go NFC system, it means CurrentC, and therefore Chase Pay, is compatible with a much larger number of smartphones. Users with phones incompatible with other payment systems could find their phones work with the Chase platform.
The Chase Pay platform will roll out to Chase's 94-million credit, debit and pre-paid card account holders, and will also tie-in with retailer loyalty cards.
The pairing with one of the country's biggest bank and card issuers will give CurrentC a major boost in the market and should ensure Chase Pay is accepted at a large number of major retailers.
CurrentC is being developed by MCX (Merchant Customer Exchange), a consortium of some of the biggest retailers in the U.S., including Wal-Mart, Target, Shell, Exxon, CVS, Dunkin Donuts and Sears.
A big impetus behind its development was the desire of retailers to prevent companies like Apple and Google from gaining an insight into their businesses and the purchases of customers. For retailers, CurrentC also offers no transaction fees.
But while trials of the technology are ongoing, CurrentC has yet to launch -- something that will need to happen before Chase Pay can get off the ground.